QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
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(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ||||
Emerging growth company |
Page |
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PART I. |
1 |
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Item 1. |
1 |
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1 |
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2 |
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3 |
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5 |
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6 |
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Item 2. |
22 |
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Item 3. |
31 |
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Item 4. |
32 |
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PART II. |
33 |
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Item 1. |
33 |
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Item 1A. |
33 |
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Item 2. |
85 |
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Item 3. |
85 |
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Item 4. |
85 |
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Item 5. |
85 |
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Item 6. |
86 |
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87 |
• |
the sufficiency of our existing cash and cash equivalents to fund our future operating expenses and capital expenditure requirements; |
• |
our ability to obtain funding for our operations, including funding necessary to develop and commercialize ACU193, subject to necessary regulatory approvals; |
• |
the ability of our clinical trials to demonstrate the safety and efficacy of ACU193, and other positive results; |
• |
the therapeutic potential of ACU193, including its potential for improved safety and efficacy, as compared to other monoclonal antibodies in development, as well as the expectations concerning the INTERCEPT-AD trial; |
• |
the success, cost and timing of our development activities, nonclinical studies and clinical trials; |
• |
the timing and focus of our future clinical trials, and the reporting of data from those trials; |
• |
our plans relating to commercializing ACU193, subject to obtaining necessary regulatory approvals; |
• |
our ability to attract and retain key scientific and clinical personnel; |
• |
our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately; |
• |
our reliance on third parties to conduct clinical trials of ACU193, and for the manufacture of ACU193 for nonclinical studies and clinical trials; |
• |
the success of competing therapies that are or may become available; |
• |
our plans and ability to obtain or protect our intellectual property rights, including extensions of existing patent terms where available; |
• |
the scope of protection we are able to establish and maintain for intellectual property rights covering ACU193 and technology; |
• |
potential claims relating to our intellectual property; |
• |
existing regulations and regulatory developments in the United States and other jurisdictions; |
• |
our ability to obtain and maintain regulatory approval of ACU193, and any related restrictions, limitations and/or warnings in the label of any approved product candidate; |
• |
our plans relating to the further development and manufacturing of ACU193, including additional therapeutic indications which we may pursue; |
• |
our ability to develop and maintain our corporate infrastructure, including our ability to remediate our existing material weakness and to design and maintain an effective system of internal controls; |
• |
our financial performance; |
• |
the effects of the ongoing COVID-19 pandemic; and |
• |
our expectations regarding the time during which we will be an emerging growth company under the JOBS Act. |
September 30, 2021 |
December 31, 2020 |
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(Unaudited) |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
$ | $ | ||||||
Marketable securities, short-term |
— | |||||||
Grant receivable |
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Prepaid expenses and other current assets |
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Total current assets |
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Marketable securities, long-term |
— | |||||||
Property and equipment, net |
— | |||||||
Other assets |
— | |||||||
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Total assets |
$ | $ | ||||||
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LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) |
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Current liabilities |
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Accounts payable |
$ | $ | ||||||
Accrued expenses and other current liabilities |
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Preferred stock tranche rights liability |
— | |||||||
Preferred stock warrant liability |
— | |||||||
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Total liabilities |
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Series A convertible preferred stock, $ |
— | |||||||
Series A-1 convertible preferred stock, $ |
— | |||||||
Series B convertible preferred stock, $ |
— | |||||||
Stockholders’ deficit |
||||||||
Preferred stock, $ |
— | |||||||
Common stock, $ |
— | |||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
Accumulated other comprehensive loss |
( |
) | — | |||||
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Total stockholders’ equity (deficit) |
( |
) | ||||||
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Total liabilities, convertible preferred stock and stockholders’ equity (deficit) |
$ | $ | ||||||
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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2021 |
2020 |
2021 |
2020 |
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Grant and other revenue |
$ | — | $ | $ | — | $ | ||||||||||
Operating expenses |
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Research and development |
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General and administrative |
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Total operating expenses |
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Loss from operations |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other income (expense) |
||||||||||||||||
Change in fair value of preferred stock tranche rights liability and preferred stock warrant liability |
— | — | ( |
) | — | |||||||||||
Interest income |
— | |||||||||||||||
Interest expense |
( |
) | — | ( |
) | — | ||||||||||
Other income |
— | — | ||||||||||||||
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Total other income (expense) |
— | ( |
) | |||||||||||||
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Net loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
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Other comprehensive loss |
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Unrealized loss on marketable securities |
( |
) | — | ( |
) | — | ||||||||||
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Comprehensive loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
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Net loss per common share, basic and diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
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Weighted-average shares outstanding, basic and diluted |
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Series A |
Series A-1 |
Series B |
Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity (Deficit) |
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Convertible Preferred Stock |
Convertible Preferred Stock |
Convertible Preferred Stock |
Common Stock |
|||||||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2021 |
$ | $ | $ | $ | $ | $ | ( |
) | $ | — | $ | ( |
) | |||||||||||||||||||||||||||||||||||
Conversion of convertible preferred stock into common stock upon initial public offering |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | — | — | ||||||||||||||||||||||||||||||||||
Issuance of common stock for cash, net of issuance costs of $ |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Cashless exercise of common stock warrants |
— | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Stock options exercised |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Unrealized loss on marketable securities |
— | — | — | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||||||||
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Balance as of September 30, 2021 |
$ | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||||||||||||||||||||
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Series A |
Series A-1 |
Series B |
Additional Paid-in Capital |
Accumulated Deficit |
Total Stockholders’ Deficit |
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Convertible Preferred Stock |
Convertible Preferred Stock |
Convertible Preferred Stock |
Common Stock |
|||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2020 |
$ | $ | — | $ | — | $ | — | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||
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Balance as of September 30, 2020 |
$ | $ | — | $ | — | $ | — | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||||||||
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Series A |
Series A-1 |
Series B |
Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity (Deficit) |
||||||||||||||||||||||||||||||||||||||||||
Convertible Preferred Stock |
Convertible Preferred Stock |
Convertible Preferred Stock |
Common Stock |
|||||||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2020 |
$ | $ | $ | $ | — | $ | $ | ( |
) | $ | — | $ | ( |
) | ||||||||||||||||||||||||||||||||||
Issuance of milestone shares for cash, net of issuance costs of $ |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Exercise of preferred stock warrant |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Reclassification of preferred stock tranche rights liability upon issuance of milestone shares |
— | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Reclassification of warrant liability upon exercise of preferred stock warrant |
— | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Exercise of common stock warrants |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Conversion of convertible preferred stock into common stock upon initial public offering |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | — | — | ||||||||||||||||||||||||||||||||||
Issuance of common stock for cash, net of issuance costs of $ |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Cashless exercise of common stock warrants |
— | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Stock options exercised |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Unrealized loss on marketable securities |
— | — | — | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||||||||
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Balance as of September 30, 2021 |
$ | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||||||||||||||||||||
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Series A |
Series A-1 |
Series B |
Additional Paid-in Capital |
Accumulated Deficit |
Total Stockholders’ Deficit |
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Convertible Preferred Stock |
Convertible Preferred Stock |
Convertible Preferred Stock |
Common Stock |
|||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 |
$ | $ | — | $ | — | $ | — | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||
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Balance as of September 30, 2020 |
$ | $ | — | $ | — | $ | — | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||||||||
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Nine Months Ended September 30, |
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2021 |
2020 |
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Cash flows from operating activities |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation |
— | |||||||
Change in fair value of preferred stock tranche rights liability and preferred stock warrant liability |
— | |||||||
Share-based compensation expense |
||||||||
Amortization of premiums on marketable securities, net |
— | |||||||
Non-cash interest income from marketable securities |
( |
) | — | |||||
Changes in operating assets and liabilities: |
||||||||
Grant receivable |
— | ( |
) | |||||
Prepaid expenses and other current assets |
( |
) | ||||||
Other assets |
( |
) | ( |
) | ||||
Accounts payable |
( |
) | ||||||
Accrued expenses and other current liabilities |
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Net cash used in operating activities |
( |
) | ( |
) | ||||
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Cash flows from investing activities |
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Purchases of available-for-sale |
( |
) | — | |||||
Purchases of property and equipment |
( |
) | — | |||||
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Net cash used in investing activities |
( |
) | — | |||||
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Cash flows from financing activities |
||||||||
Proceeds from issuance of Series B milestone shares, net of issuance costs |
— | |||||||
Proceeds from exercise of Series A-1 warrant |
— | |||||||
Proceeds from exercise of common stock warrants |
— | |||||||
Proceeds from issuance of common stock upon initial public offering, net of issuance costs |
— | |||||||
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Proceeds from stock option exercises |
— | |||||||
Net cash provided by financing activities |
— | |||||||
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Net change in cash and cash equivalents |
( |
) | ||||||
Cash and cash equivalents at the beginning of the period |
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Cash and cash equivalents at the end of the period |
$ | $ | ||||||
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Supplemental disclosure of cash flow information |
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Cash paid for income taxes |
$ | $ | — | |||||
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Cash paid for interest |
$ | $ | — | |||||
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Supplemental disclosure of noncash financing activities |
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Reclassification of preferred stock tranche rights liability upon share issuance |
$ | $ | — | |||||
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Reclassification of warrant liability upon exercise of preferred stock warrant |
$ | $ | — | |||||
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Conversion of convertible preferred stock into common stock upon initial public offering |
$ | $ | — | |||||
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|
Fair value measurements at reporting date using |
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Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Fair Value at September 30, 2021 |
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Assets included in: |
||||||||||||||||
Cash and cash equivalents |
||||||||||||||||
Money market securities |
$ | $ | — | $ | — | $ | ||||||||||
Marketable securities |
||||||||||||||||
Commercial paper |
— | — | ||||||||||||||
Corporate debt securities |
— | — | ||||||||||||||
Asset-backed securities |
— | — | ||||||||||||||
U.S. treasury securities |
— | — | ||||||||||||||
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|||||||||
Total fair value |
$ | $ | $ | — | $ | |||||||||||
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Fair value measurements at reporting date using |
||||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Fair Value at December 31, 2020 |
|||||||||||||
Assets included in: |
||||||||||||||||
Cash and cash equivalents |
||||||||||||||||
Money market securities |
$ | $ | — | $ | — | $ | ||||||||||
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|||||||||
Total fair value |
$ | $ | — | $ | — | $ | ||||||||||
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|||||||||
Liabilities included in: |
||||||||||||||||
Preferred stock tranche rights liability |
$ | — | $ | — | $ | $ | ||||||||||
Preferred stock warrant liability |
— | — | ||||||||||||||
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|||||||||
Total fair value |
$ | — | $ | — | $ | $ | ||||||||||
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Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
|||||||||||||
Available-for-sale |
||||||||||||||||
Commercial paper |
$ | $ | — | $ | — | $ | |
|||||||||
Corporate debt securities |
— | ( |
) | |||||||||||||
Asset-backed securities |
— | ( |
) | |||||||||||||
Total available-for-sale |
— | ( |
) | |||||||||||||
Available-for-sale |
||||||||||||||||
Corporate debt securities |
— | ( |
) | |||||||||||||
Asset-backed securities |
— | ( |
) | |||||||||||||
U.S. treasury securities |
— | — | ||||||||||||||
Total available-for-sale |
— | ( |
) | |||||||||||||
Total available-for-sale |
$ | |
$ | — | $ | ( |
) | $ | ||||||||
September 30, 2021 |
December 31, 2020 |
|||||||
Prepaid insurance |
$ | $ | ||||||
Research and development service agreements |
||||||||
Prepaid raw materials |
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Other |
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|
|||||
Total prepaid expenses and other current assets |
$ | $ | ||||||
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|
|
September 30, 2021 |
December 31, 2020 |
|||||||
Bonuses and other employee liabilities |
$ | $ | — | |||||
Research and development |
||||||||
Other |
||||||||
Professional fees |
||||||||
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|||||
Total accrued expenses and other current liabilities |
$ | $ | ||||||
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|
Shares Authorized |
Shares Issued and Outstanding |
Weighted Average Issuance Price per Share |
Carrying Value |
Liquidation Preference |
||||||||||||||||
Series A |
$ | $ | $ | |||||||||||||||||
Series A-1 |
||||||||||||||||||||
Series B |
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Total |
$ | $ | ||||||||||||||||||
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|
June 17, |
December 31, |
|||||||
2021 |
2020 |
|||||||
Risk-free interest rate |
% | % | ||||||
Expected time to Milestone Closing (in years) |
||||||||
Probability of achievement of Milestone Closing |
% | % |
June 22, 2021 |
December 31, 2020 |
|||||||
Risk-free interest rate |
% | % | ||||||
Expected term (in years) |
||||||||
Expected volatility |
% | % | ||||||
Expected dividend yield |
% | % |
Series A-1 Preferred Stock Warrant |
Series B Tranche Rights |
Total |
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Balance, December 31, 2020 |
$ | $ | $ | |||||||||
Change in fair value |
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Settlement of tranche liability due to issuance of Milestone Shares |
— | ( |
) | ( |
) | |||||||
Settlement of warrant liability upon exercise of warrant |
( |
) | — | ( |
) | |||||||
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Balance, September 30, 2021 |
$ | $ | $ | |||||||||
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Equity Upon Exercise |
Exercise Price |
Expiration Dates |
Number of Warrants |
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Warrants issued in 2014 |
Common Stock | $ | ||||||||||||||
Warrants issued in 2015 |
Common Stock | $ | ||||||||||||||
Warrants issued in 2016 |
Common Stock | $ | ||||||||||||||
Warrants issued in 2017 |
Common Stock | $ | ||||||||||||||
Total Warrants |
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Risk-free interest rate |
% | |||
Expected term in years |
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Expected volatility |
% | |||
Expected dividend yield |
% |
Risk-free interest rate |
% | |||
Expected time to liquidity event in years |
||||
Expected volatility |
% | |||
Expected dividend yield |
% |
Stock Options |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Life (in years) |
Aggregate Intrinsic Value (in thousands) |
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Outstanding at December 31, 2020 |
$ | |||||||||||||||
Granted |
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Exercised |
( |
) | ||||||||||||||
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Outstanding at September 30, 2021 |
$ | $ | ||||||||||||||
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Vested and exercisable at September 30, 2021 |
$ | $ | ||||||||||||||
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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2021 |
2020 |
2021 |
2020 |
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General and administrative |
$ | $ | $ | $ | ||||||||||||
Research and development |
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Total share-based compensation |
$ | $ | $ | $ | ||||||||||||
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Year ended December 31, 2021 (remaining 3 months) |
$ | |||
Year ended December 31, 2022 |
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Year ended December 31, 2023 |